On the back of slowdown in growth, direct tax collections have fallen short of budget projections; a trend that is expected to continue in the second half of the fiscal, reports CNBC-TV18’s Aakansha Sethi.

The government had, in the Budget, projected over a 19 percent increase in direct taxes. Actually, there has been only an increase of about 10.8 percent in the first half of this fiscal. It has led to a shortfall of about Rs 20,000 crore in direct tax collections. Also read: Slowing economy: Here are tips to spend money smartly The government is struggling to meet a 4.8 percent fiscal deficit target. The shortfall will only mean that more expenditure cuts. The disinvestment target is also far from being met and subsidies are likely to overshoot significantly. The tax department is going to rely more on arrears from previous years. The total target for arrears for this year is Rs 61,000 crore against total arrears of about Rs 1,90,000 crore. Around Rs 21,000 crore has already been received.

The finance ministry hopes to focus on this over the second half. It is going to complete its assessments by December this year, unlike March every year so that they can crack down on evasions. It will also focus on non-filers of income tax returns. This is the income tax department’s (I-T) three-pronged strategy to ensure it covers up shortfall. If growth continues this way, in the second half, the IT department expects more shortfall in collections.